Last week in telecoms: earnings season kicked off, Liberty Global steps in to save Sunrise deal, BT starts brand campaign

octombrie 21, 2019

The Telecompaper European Telecom Services index ended week 42 up 1.2 percent, ahead of the EuroStoxx 50 index (+0.3%), according to Telecompaper. Tele Columbus gained 14 percent in an apparent recovery. Earnings season was kicked off and a number of M&A deals moved forward. Private company Eir, controlled by Iliad’s founder, launched an aggressive promotion on the Irish mobile market and BT kicked off a large brand campaign.

First, the companies reporting their Q3 results. They included QSC (+1.9% for the week), Telekom Austria (+7.2%), Telia (-4.9%), Tele2 (+1.6%) and Elisa (+2.9%).

M&A

Next, the M&A market where three deals are progressing.

Liberty Global (+5.3%) stepped in to save its deal to sell UPC Switzerland to Sunrise (-2.9%). It will underwrite the associated Sunrise capital increase for a maximum of CHF 500 million, which could see it build a stake of at most 7.8 percent in the merged entity. Sunrise’s shareholder Freenet (+1.9%) didn’t change its mind because it is the agreed takeover price, that Sunrise is paying, that it doesn’t approve of.
In Italy, Vodafone (-0.5%) created a tower unit ahead of injection the assets into TIM (-0.1%) controlled Inwit (-0.8%).
Telenor (-0.4%) is close to finalising its DNA (-0.5%) takeover now that its stake has increased to almost 98 percent.

Niel in Ireland

Of note was an agressive promotion on the Irish mobile market by Eir (not listed), controlled by Iliad (+6.7%) founder Xavier Niel. After having tested an aggressive temporary and limited promotion in France and Italy, Ireland appears to be the third market where Niel is aiming to build or increase his market share by heavily undercutting the competition. Eir’s MNO competitors are Vodafone and 3 Ireland, controlled by CK Hutchison (+3.8%).

Branding

In other news, Wind Tre (also a unit of CK Hutchison) was rumored to move to a single brand next year. The company was built on the merger of Wind Italia and 3 Italia. In the UK, BT (+4.7%) kicked off a brand campaign, the biggest in 20 years, around its new Beyond Limits motto.